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What will happen in Sweden’s real estate market? Will prices go up or down? Is Stockholm still a hotspot for foreign investors? How is Sweden’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with real estate agents, property developers, and clients who buy properties in Sweden, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Sweden’s property prices will adjust moderately as interest rates go up gradually
The Swedish real estate market is gearing up for some changes as interest rates are set to rise.
In recent years, the Swedish Riksbank had lowered interest rates to tackle weak economic activity, but now, interest rates are expected to climb to 1.75% in 2025 and 2.00% in 2026. This shift means that borrowing costs will increase, potentially slowing down the housing market. Historically, when interest rates rise, the housing market tends to cool off. For instance, house prices in Sweden dropped by 6.31% in 2023 during the last rate hike cycle.
The rapid increase in mortgage rates, which jumped from 1.5% in early 2022 to a peak of 4.8% by the end of 2023, has already had a noticeable impact. Households are feeling the pinch, with fewer mortgage approvals and applications. This trend is making potential buyers more cautious, as higher borrowing costs are dampening enthusiasm for purchasing property.
Consumer surveys and real estate agent reports highlight that home sales fell by 18.7% year-on-year in 2023. As demand waned, inventory levels rose, leading to properties lingering on the market longer. This slower sales pace is evident in major cities like Greater Stockholm and Greater Göteborg, where sales volumes have also taken a hit.
These developments suggest a moderate price correction is on the horizon. With properties staying on the market longer and sales volumes declining, the market is adjusting to the new interest rate environment. Buyers might find more opportunities as the market cools, but they should be prepared for higher borrowing costs.
Sources: Euronews, S&P Global Ratings, Global Property Guide, Trading Economics
2) Rental prices in university towns will rise as more students increase demand for housing
Student enrollment in Sweden has surged in recent years, especially in 2023 and 2024.
With nearly 40,000 international students joining the mix, university towns are buzzing with activity. This influx means more students are hunting for places to live, driving up the demand for housing.
Rental prices in Sweden have been climbing steadily. In 2023, rents went up by an average of 5.2%, and in bustling university towns like Stockholm, there was a 4.5% increase. This trend is a clear sign that as more students arrive, rental prices are bound to rise.
Even though new student housing projects have slowed down, the demand hasn't wavered. Looking ahead to the 2024-2025 academic year, experts predict a potential 10% jump in rents. This is because the demand is strong, but the supply isn't keeping up, giving landlords the upper hand to set higher prices.
In these competitive markets, landlords are in a sweet spot. They can charge more because students are eager to secure housing, and there aren't enough new places being built to meet the demand. This dynamic is especially pronounced in university towns where student populations are swelling.
So, if you're considering buying property in these areas, it's worth noting that the rental market is hot and likely to stay that way as long as student numbers keep climbing.
Sources: Global Property Guide, Statista, CrowdStreet
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Sweden versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Demand for modern, tech-enabled apartments will grow as more young professionals move to cities
Young professionals are flocking to urban areas in Sweden, especially cities like Stockholm, Gothenburg, and Malmö.
These cities are buzzing with opportunities, and the Swedish Statistical Office notes that population growth is largely driven by young professionals seeking better jobs and modern living. It's not just about work; it's about lifestyle too.
Fastighetsbyrån reports a surge in rental demand, with Stockholm seeing a 10% increase between 2023 and 2024. Young professionals are on the hunt for modern, tech-savvy apartments that offer convenience and connectivity.
According to a Hemnet survey, 70% of young professionals in Sweden prefer tech-enabled apartments. They want a high-quality living experience that matches their fast-paced, digital lives.
The tech industry in Sweden is booming, and it's a magnet for young talent. The Swedish Trade Federation highlights how the tech sector's growth is creating more urban job opportunities, especially in Stockholm and Gothenburg.
These cities are not just about work; they're about modern amenities and a vibrant lifestyle. Young professionals are drawn to the urban buzz, where career prospects and quality living go hand in hand.
Sources: Swedish Statistical Office (SCB), Fastighetsbyrån, Hemnet, Swedish Trade Federation (Svenskt Näringsliv)
4) Demand for homes with office spaces in Sweden will grow as remote work becomes more common
In Sweden, remote work has become a major trend, especially in 2023 and 2024.
With nearly 44% of employees working from home in 2023, Sweden is a top player in the remote work scene, ranking 5th globally. This shift is changing what people look for in a home. More Swedes now want properties with dedicated office spaces, driven by the need for a better work-life balance and a productive home environment.
Real estate listings are reflecting this change, showing a clear demand for homes with office amenities. People are not just looking for any space; they want homes equipped with strong digital infrastructure to support their work needs. This is becoming a key factor in home-buying decisions.
Sales of home office furniture and equipment are booming, as individuals aim to set up efficient workspaces. The media is also highlighting the perks of remote work, like boosted productivity and improved work-life balance, which are swaying consumer choices.
Insider knowledge suggests that properties with flexible spaces are particularly appealing. These spaces can easily transform from a home office to a guest room, offering versatility that modern buyers appreciate.
As remote work solidifies its place in Swedish culture, the real estate market is adapting. Buyers are prioritizing homes that cater to their new work-from-home lifestyles, making home office spaces a top priority in their search.
Sources: Statista, NordLayer, Nordic Council of Ministers
5) Eco-friendly home development in Sweden will grow due to new environmental regulations
Sweden is making big moves to promote eco-friendly residential properties.
Starting July 2025, new regulations will enforce limit values for the climate impact of buildings, pushing builders to think green from start to finish. By 2027, these rules will cover the entire building life cycle, encouraging the use of sustainable materials and practices.
Green building certifications like Miljöbyggnad, which has been around since 2011, are gaining traction. This reflects a growing consumer preference for sustainable living, with more people seeking homes that are both energy-efficient and environmentally friendly. The Swedish version of BREEAM, known as BREEAM-SE, is also popular, underscoring the trend towards green building.
Sweden's government is also pushing for energy efficiency in new constructions, ensuring homes meet stringent energy standards. This is part of Sweden's broader goal to achieve net-zero emissions by 2045, which includes significant investments in renewable energy for residential properties.
Builders are increasingly motivated to adopt eco-friendly practices to meet these regulatory requirements and consumer demands. The focus on energy efficiency and sustainable materials is not just a trend but a necessity driven by new environmental regulations.
Sources: Nordic Sustainable Construction, Wikipedia, IEA
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6) Demand for properties with shared spaces will grow as people look for community and collaboration
In Sweden, the demand for co-living spaces is on the rise, especially in cities like Stockholm.
Companies such as COLIVE, LifeX, and Tech Farm are leading the way, offering homes that focus on community and collaboration. These spaces are not just about having a roof over your head; they are about creating a sense of belonging and shared experiences.
Interestingly, the co-working space market in Sweden is booming, with its value hitting USD 431.9 million in 2023. This growth is not just about workspaces; it's influencing how residential projects are designed, with more emphasis on shared amenities.
In Stockholm, surveys reveal that people love the social connections and community engagement that come with shared housing. This trend is particularly appealing to urbanites who crave deeper, more meaningful interactions.
As more people seek out these community-focused living arrangements, properties with shared spaces are becoming increasingly popular. It's not just about having a place to live; it's about being part of a community.
For those considering buying property in Sweden, understanding this shift towards community living is crucial. Shared spaces are not just a trend; they are becoming a lifestyle choice for many.
Sources: KTH Diva Portal, Lund University Publications, Next Move Strategy Consulting
7) Demand for larger homes in Sweden will grow as more families move to the suburbs
Sweden is experiencing a demographic shift as families flock to suburban areas.
Between 2020 and 2023, there was a noticeable increase in population in localities and small localities, with about 90% of the population now living in these areas. This shift highlights a growing preference for suburban living, where families are seeking more space and a better quality of life.
Surveys reveal that many families are on the hunt for larger homes, and Statistics Sweden notes a need for 15,000 new homes annually to meet this demand. This trend is evident as more people move from urban centers to suburban regions, where spacious living arrangements are more common.
Government policies have also nudged this shift along. The Swedish government has increased the housing allowance for families with children, making suburban living more financially viable. Additionally, improved infrastructure and transportation plans have made suburban areas more accessible, enhancing their appeal.
These changes are not just about space; they reflect a desire for a better lifestyle. Families are drawn to the suburbs by the promise of a more relaxed environment, with enhanced connectivity making it easier to commute to urban centers when needed.
As a result, the demand for larger homes in Sweden's suburban areas continues to grow, driven by a combination of population trends, government incentives, and improved infrastructure.
Sources: Statistics Sweden, Nordea, Swedish Government
8) Demand for affordable housing in Sweden will rise as the immigrant population grows
Sweden's immigrant population is steadily growing, leading to a rising demand for affordable housing.
In cities like Stockholm, this demand is particularly intense. The immigrant demographic is diverse, including young people, pensioners, single-parent families, and refugees, all of whom are vulnerable to housing shortages. Many of these individuals are part of low-income groups, which means they are disproportionately affected by the lack of affordable housing. In Stockholm alone, about 80,000 people are in urgent need of affordable housing, with some resorting to overcrowded living conditions or the black market.
Refugees face even tougher challenges when it comes to finding long-term housing. Many are stuck in temporary accommodations because public housing is scarce. Municipal companies have managed to provide temporary housing for thousands of refugees, but finding permanent solutions is still a major hurdle.
As the immigrant population continues to grow, the pressure on the housing market will only increase. This situation underscores the critical need for more affordable housing options to accommodate these new residents. The current housing infrastructure is struggling to keep up with demand, especially in urban areas.
For potential property buyers, this means that investing in affordable housing could be a smart move. The growing immigrant population is likely to drive demand for such properties, making it a potentially lucrative market.
Understanding these dynamics can provide valuable insights for anyone considering buying property in Sweden. The need for affordable housing is not just a social issue but also an opportunity for investment.
Sources: SCB, La Fabrique de la Cité, Phys.org
We have made this infographic to give you a quick and clear snapshot of the property market in Sweden. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Gothenburg’s property market will grow as it becomes a center for green tech and sustainable living
Gothenburg's real estate market is poised for growth as it transforms into a hub for green technology and sustainable living.
In recent years, the city has seen a surge in investment in green tech companies like PulPac and Atium, which have attracted millions in funding. This influx of capital underscores the growing confidence in Gothenburg's green tech sector, making it an attractive destination for investors and homebuyers interested in sustainability.
Gothenburg's startup scene is buzzing, ranking 2nd in Sweden for its vibrant ecosystem. Many startups focus on Energy & Environment, Transportation, and Hardware & IoT, reflecting the city's strong emphasis on green technology. This dynamic environment is a testament to Gothenburg's commitment to sustainability and innovation, drawing in talent and resources.
Government incentives and city plans are further fueling this trend. Gothenburg aims to build 105,000 new homes by 2035, with a strong focus on sustainable living. Projects like the Älvstaden development area are set to create thousands of eco-friendly housing units, appealing to residents who prioritize sustainability.
As Gothenburg continues to develop its green initiatives, the real estate market is expected to benefit from the city's reputation as a leader in sustainable living. The combination of government support, a thriving startup scene, and significant investment in green technology positions Gothenburg as a prime location for those looking to invest in property with a sustainable edge.
Sources: Seedtable, The Sustainable Agency, Business Region Gothenburg
10) Blockchain will make property deals in Sweden cheaper and more transparent
In recent years, blockchain technology has revolutionized the global real estate industry.
In Sweden, this shift is particularly evident. Several pilot projects have successfully showcased blockchain's potential in property transactions. For example, Lantmäteriet, Sweden's land registry authority, led a consortium to explore blockchain applications, aiming to cut down on information gaps and potentially save over €100 million annually.
These projects have allowed all parties involved in property transactions to monitor progress in real-time, which has significantly reduced costs and increased transparency. The Swedish government has been a strong supporter of this digital transformation, actively proposing legislative changes to adapt the law to distributed ledger technology.
This governmental backing has been crucial in integrating blockchain into property transactions, making the process more efficient. The use of smart contracts and immutable property records has eliminated the need for intermediaries, enhancing security and transparency.
As a result, property transactions in Sweden have become more streamlined and efficient. The integration of blockchain technology has transformed the real estate sector, offering a glimpse into the future of property transactions.
Sources: Legal 500, Blockchan.ge, Axis Technical
11) Demand for homes with high-speed internet will grow as digital connectivity becomes a top priority for buyers
In Sweden, the demand for homes with high-speed internet has surged as more people work from home.
With the shift to remote work, having a reliable internet connection is now a top priority for many homebuyers. This is especially true in suburban areas where people are seeking more space without sacrificing connectivity. By the end of 2023, most Swedish households enjoyed internet speeds of 100 Mbit/s or more, making these homes particularly appealing to those who rely on technology for work and leisure.
The Swedish government is pushing to ensure nearly everyone has access to super-fast internet by 2025. This initiative is turning high-speed internet into a standard feature, further boosting the appeal of homes in well-connected areas. As digital connectivity becomes a priority, properties with robust internet infrastructure are seeing increased interest.
Smart home technology is another factor driving this trend. Many modern devices require a strong internet connection, prompting buyers to seek homes that can support their tech needs. This shift is not just about convenience; it's about future-proofing homes for the digital age.
In the real estate market, homes with superior digital infrastructure are commanding higher prices. Buyers are willing to pay a premium for properties that offer the connectivity they need for work and daily life. This trend is reshaping the housing market, with high-speed internet becoming as essential as electricity or water.
Sources: PTS Report, Tolj Commercial, Scope Ratings, Digital Watch
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12) Affordable housing projects will grow, creating a more balanced real estate market for all income levels
In Sweden, affordable housing projects are gaining momentum thanks to increased government support.
One standout initiative is the SHERIS project, which received a EUR 11 million grant from the European Union. This project plans to build seven housing complexes in Northern Sweden, with a total budget of EUR 142 million, including a loan from the European Investment Bank. The aim is to address the rising demand for affordable housing as more people are pushed towards home ownership due to a lack of rental options, driving up house prices.
Income inequality has been a significant factor, with income inequality in Sweden tripling between 1978 and 2017. This has led to increased residential income segregation in cities like Stockholm, Malmö, and Gothenburg, creating pockets of poverty and highlighting the need for equitable housing solutions.
Public and private sectors are teaming up to tackle this issue, as seen in the SHERIS project. This collaboration between the municipality of Skellefteå and the European Investment Bank shows a strong commitment to affordable housing through joint funding efforts.
Demographic changes, such as the rapid population growth in Skellefteå, are driving the need for sustainable and affordable housing. These developments are essential to meet the housing demand, especially in areas transitioning to greener economies.
The SHERIS project plans to build 750 energy-efficient social housing units, significantly boosting the annual number of affordable homes in Sweden. This effort is a major step towards a more balanced real estate market across different income levels.
Sources: European Commission, International Banker, Sociological Science
13) Demand for energy-efficient homes in Sweden will grow as the country focuses on cutting carbon emissions
Sweden is making waves in the real estate market with its strong commitment to reducing carbon emissions.
In Sweden, homes with high Energy Performance Certificate (EPC) grades are in high demand, and buyers are paying a premium for these energy-efficient properties. This trend shows that people are increasingly valuing homes that save energy, which is a clear sign of growing interest in sustainable living.
The Swedish government is also playing a big role by offering financial incentives to encourage energy efficiency. For example, they provide a grant of SEK 60,000 to help homeowners upgrade their homes with energy-efficient features. This support makes it easier for people to invest in such properties, further driving demand.
Swedes are becoming more interested in sustainable living, and this is evident in the rise of green building certifications like LEED. These certifications are often linked to energy-efficient homes, and as more people recognize the benefits of reduced utility costs, the demand for these properties is expected to grow.
In Sweden, the push for energy efficiency is not just a trend but a lifestyle choice. The government's initiatives and consumer preferences are aligning to create a market where energy-efficient homes are highly sought after. This shift is not just about saving money but also about making a positive impact on the environment.
As more Swedes embrace sustainable living, the real estate market is likely to see a continued rise in demand for energy-efficient properties. This is not just a local trend but part of a global movement towards more sustainable living practices.
Sources: Diva Portal, ULMA, Statista
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.